This post is inspired by Jon Dulin’s article on the psychology of money and how advertisers get us to spend (read it on MoneySmartGuides.com). As someone who works in the consumer industry, I’d like to think I’m not only privy to these tactics but also somehow “above” being duped by them. After all, part of my job is to educate consumers on how to be smarter shoppers. While the strategies Jon discusses are not entirely new, I did draw several parallels to my own shopping behavior that essentially knocked me off my proverbial high horse.
While reading the article, I realized the underlying tactic to all of these strategies is control. Retailers, restaurants and service providers use these strategies to control your spending behavior for their benefit. In order to get the full value of a promotion — whether it’s a discount, reward or cash-back — YOU have to be in control. The moment you let go of the reigns, the stores and advertisers are the winners and your bank account is the loser.
With that in mind, here’s a list of tactics I’ve fallen victim to.
Credit Card Miles — Jon calls out credit card and cash-back rewards as strategies used by advertisers and I’m definitely their pawn on both fronts. I feel justified swiping my credit card for purchases I don’t need because of the airline miles I’ll accrue. Since when is the affordability and practicality of a purchase based on the the amount of “rewards” you receive as a result? I do pay off my credit card balance every month, but the rewards system has definitely influenced some unwise purchases.
Retail Rewards — This one relates to rewards but also to Jon’s “buy more, save more” tactic. One of the apparel stores I shop at regularly occasionally offers “virtual dollars,” or a $25 credit toward a future purchase of $50 or more when you spend a certain amount. There’s a time limit on these virtual dollars and also a timeframe in which they can be used. Essentially, the store is not only controlling how much I spend now, but also when I make my next purchase and for how much. I’ve used these rewards strategically to save some serious cash, but I can also see how destructive they can be to one’s budget.
Sale Euphoria – I’m more compelled to buy several clothing items for $75 than to invest in one garment for $70, an affliction I refer to as “sale euphoria.” The potential of buying several items within my budget instead of just one fools me into thinking I’m getting a better value. This highlights the importance of analyzing cost-per-use: if a blazer costs me $70 but I wear it once a week, it actually costs me less than the sweater I bought on sale for $20 that I only wear once.
Vanity Sizing — If something I try on is a size XS and fits, I find myself liking it better even if the style isn’t what I’m looking for. Why? Because it’s an XS! That means my lack of exercise and that pint of Ben & Jerry’s I downed last week hasn’t hurt my figure! Yay! An example of this is the XS trench coat I bought from Zara a few years back. It’s beautiful and fits me well, but it’s too snug to fit sweaters underneath, limiting my ability to wear it when I need it most. So dumb!
Promotional Emails — One of my go-to tips for saving money is to subscribe to retailer newsletters and time shopping trips around deals and promotions. I also recommend people create a separate email so the urgency associated with these messages doesn’t result in impulse spending. While I still think this is a solid tactic, I recently became so overwhelmed by the volume of email in my promotional inbox that I unsubscribed from everything. I’ll likely subscribe to messages in the future, but I’ll be more strategic about it — no more signing up for anything and everything just to get the deal!
Return Shipping — As much as I loathe to admit it, return shipping fees have occasionally led me to keep a purchase I don’t absolutely love. My favorite clothing store no longer has a physical presence in my town, so I shop online with them. Of the dozen or so things I’ve bought since the store shut down, I think maybe three or four items have been home runs. A few items I’ve kept because I don’t want to pay return shipping; doing so means I’m paying them for the pleasure of trying something on. However, not doing so is a waste of even more money, so my logic here is totally flawed.
Liquor — Shopping while sauced is a recipe for overspending, plain and simple. The best example of this is my beer shirt collection. If I saw the shirts I’ve purchased from breweries in a traditional retail setting without having consumed a pint of craft brew, I would NOT have purchased 90% of them. In fact, I may not have purchased any of them. That realization is a tough one to admit, especially since I STILL peruse their wares every time I go by the off chance something BEYOND CUTE is waiting for me. Am I doomed?
There. I feel better now. In fact, I’m more prepared to identify these strategies and NOT fall victim to them in the future. Big thanks to Jon at Money Smart Guides for inspiring this confessional!
C’mon, admit it: what sales tactics have duped you recently?